By Jagoda Darlak
(Reuters) -Finnish stainless steel maker Outokumpu reported third-quarter core profit below market expectations on Wednesday and said it was investing $45 million in a new pilot plant in the United States.
The company’s adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) fell 60% to 34 million euros ($40 million) in the June-September period, below analysts’ forecast of 35.7 million in a poll provided by the company.
European steelmakers have been facing challenges that include subdued domestic demand and elevated energy costs, as well as severe pressure from low-priced imports from Asia, especially China.
Global trade tensions triggered by U.S. President Donald Trump’s import tariffs meanwhile weigh on the mood among consumers, slowing down economic and industrial activity.
“The underlying demand for stainless steel continues to be subdued due to low investment and manufacturing activity as well as weak consumer confidence,” CEO Kati ter Horst said in a statement.
Outokumpu said it would open a new pilot plant in New Hampshire in the U.S., where it is the second largest stainless steel producer, to make critical carbon-free materials such as chromium metal and enriched ferrochrome.
The group’s stainless steel deliveries fell by 11% in the third quarter and are expected to decline by another 5% to 15% in the fourth quarter due to market weakness in Europe and seasonal slowdown in the Americas.
“Asian imports to Europe still remain high compared to the low demand in the stainless steel market,” Outokumpu said.
($1 = 0.8575 euros)
(Reporting by Jagoda Darlak; editing by Milla Nissi-Prussak)
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